"Promising opportunities in the global market."
It's a mantra that was repeated more than once during last week's annual convention of Western United Dairymen (WUD) in Modesto, Calif.
"There are huge opportunities globally,” said dairy market analyst Jerry Dryer. "We just need to learn how to capture them.”
In his March 11 presentation, Dryer told the audience of some 275 dairy producers and industry representatives that "you need to make the products that the customer wants.”
Domestically, California's dairy industry is losing its competitive edge, Dryer said, as producers in the Midwest and other regions begin to adapt the Western model of efficient, larger-scale dairying.
But California is poised to take advantage of the unfolding export market – if it can meet the different needs of foreign buyers. That may mean thinking in term of kilograms or liters instead of pounds, he added.
Other problems: "U.S. manufacturers don't have enough troops on the ground,” in overseas markets, Dryer said. Volatile pricing and inadequate packaging are other stumbling blocks.
Dryer's outlook echoed what WUD's CEO Michael Marsh said earlier in the day.
In his annual report to members, Marsh cited the United Nations' Food and Agriculture Organization in predicting that food production in the next 50 years will have to double to meet the needs of the planet.
Among the "brighter future” trends Marsh pointed to:
· A world population that will increase from 6.7 billion people today to 9 billion by 2050;
· A new affluence among consumers in global market, especially in China and India. With more money to spend, consumers will seek more protein, accounting for the biggest increase for meat and dairy ever seen;
· Farming will be done on only 1% more acres, meaning today's family farm investment will only become more valuable.
Traditional sources of supply won't be able to meet the new market dynamics of growing dairy demand. "But the U.S. can,” Marsh said. "Shortages of milk will create growth opportunities for the U.S.”
Longer term, Brazil and the Ukraine will compete for a larger share of the market, "so we have to prepare to compete and act now,” Marsh said.
But the U.S. has its shortcomings in the eyes of international customers, added Marsh. Among its faults:
- The U.S. is too frequently in and out of markets.
- Oceania beats the U.S. in quality.
- The U.S. product mix doesn't meld with customers' needs.
- The U.S. offers only inconsistent customer service. "If they want the packaging just so, let's do it so we get the sale instead of Australia or the European Union,” Marsh said.
"We have to take care of the home front and not neglect the global marketplace,” said Marsh. "We have to be bold in facing adversity, driven to create products the global marketplace wants and committed to being a winner.”
Catherine Merlo is Western editor for Dairy Today. You can reach her at firstname.lastname@example.org.